Video-conference? No, Telepresence!

Excerpt from our One-Page WSJ Summary:

Better Virtual Meetings

Summary: The days of low quality videoconferencing are over. That is, if you adopt the latest high-end systems dubbed 'telepresence,' which feature big-screen plasma TVs, broadcast quality cameras, and high-speed phone lines. The retired chairman of BP describes his first experience with telepresence, "... they were almost life-size. It was perfect vision, perfect voice. You almost wanted to reach out and shake their hands." The systems can cost up to 50 times as much as traditional videoconference setups; as much as $1 million for two locations and $500,000 for each additional one, in addition to as much as $18,000 a month for the high-speed connection. Customers so far include: AMD, GlaxoSmithKline, Lazard, Merck, Nokia, Pearson and Pepsi. There doesn't seem to be any questioning of cost savings and/or return on investment from installing a telepresence system. But Andrew Davis, managing partner of Wainhouse Research, sees this mostly as hype, commenting that "It's a lot of publicity over stuff I don't believe will be that important. But it will drive interest in videoconferencing." He thinks potential buyers will instead opt for a system that is, "almost as good for one-10th the price."
Related links: Full WSJ article • Cisco: Official Networking Blog discusses telepresence • HP: Video Collaboration "Halo" website • Polycom: Investor relations website
Potentially impacted stocks and ETFs: Main competitors in telepresence: Teliris, closely held firm with dual HQ in NY and London • Hewlett-Packard (HPQ) and DreamWorks Animation SKG (DWA) • Polycom (PLCM), the market leader in traditional video-conferencing • Tandberg ASA, the number 2 video-conferencing firm trades in Norway • Cisco (CSCO) to enter market this year • Airline industry could be negatively impacted from less business-class travel • Positive trend for plasma TV manufacturers: Matsushita (MC), Samsung, LG Electronics, Philips (PHG) and Hitachi (HIT)

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Comments

[richmavrogeanes]

We've been outfitting companies with telepresence since 1998...in fact we likely popularized the term vs. legacy "videoconferences... We welcome Cisco to the market. But while the author suggests gold-plated prices for this type of equipment, the fact is thousands of people have been doing this for years at far, far lower costs.

I don't believe you can get almost-as-good for 1/10'th the price....you can get true telepresence for 1/10th the price, but not using legacy videoconference gear and without spending anything near $18K per month for bandwidth service, largely because the initial institutions that deploy it already have the necessary fat pipes.

Cisco saying telepresence is good will certainly help make more people aware there is life beyond the 1970's videoconference technology. Telepresense is more related to IPTV and television broadcast than it is related to legacy videoconference gear, and its emergence as a tool for better communications will have important social, economic, and even political consequences IMHO.

Cisco has fired a lot of blanks in recent years as they attempt to get their arms around this market, but in time they may get the right formula. In any case, video deployment drives infrastructure sales (more routers, more switches) and drives convergence (more IPTelephony, more caching), so whether Cisco does well with video or files more blanks, its still good for Ciso and the whole video, multimedia, and networking industry.

Rich Mavrogeanes
VBrick Sytems, Inc.
vbrick.com